From OpenCongress: Donny Shaw asks, What's Next for Reforming Wall Street

Note: red highlights are Midknight Review's.

Donny Shaw writes,

As you’ve no doubt heard by now, the Senate officially passed their financial reform bill, the Restoring American Financial Stability Act, last night by a vote of 59-39. Four Republicans joined most Democrats in supporting it, and two Democrats broke rank from the left to vote against it.

They turned it into a substitute amendment to the House’s bill, so S.3217 is now H.R.4173 and we have two different versions of the same bill — one as passed by the House and one as passed by the Senate. The next step in getting the bill into law is for House and Senate leaders to convene a “conference committee” to iron out the differences between the two versions.

This is a critical step in the process. Although the two versions generally have the same shape and do many of the same things, there are some really significant differences in the details. For example, the Senate bill requires banks to spin off their derivatives trading activities into a separate entity that wouldn’t have access to Federal Reserve money. The House bill has no such requirement. This is a huge provision, and how it is resolved by the conference committee will have lasting ramifications for Wall Street and the economy at large. It’s looking like they might bring C-SPAN cameras into the conference committee room, so we will at least get to see the formal process shaping the final bill. Back-room deals will, of course, remain in the back rooms.

One important thing to know about the conference committee process is that it can only be used to resolve differences in the bills, not for expanding their scope. They can choose between provisions in the two versions or craft new compromises between differing provisions. But they can’t add language that goes beyond what is in either bill.

The Wall Street Journal has the best comparison (that I’ve seen) of the two versions of the bill. I’m copying it below because this is crucial information for following this crucial final step in the process.